Polish Yourself with (a) Pledge

What a difference a few years makes.The dirty stain made by consumer fraud, elder financial abuse, investment scams, corporate scandals, and “creative” accounting practices, has continued to soil the confidence of investors in the financial services industry.

And in just the past two years, the Securities & Exchange Commission (SEC), the National Association of Securities Dealers (NASD), and various State Insurance Departments have attempted to apply their brand of polish by levying fines that total over $5 billion against tens of thousands of brokers, agents, brokerage firms, and insurance companies for ethical misconduct.

Regulatory action and damage control measures have made countless headlines and the message is loud and clear:  the industry as a whole is demanding a shift to absolute honesty and competency from the top down.  Investors are insisting that their advisor willfully embrace a strict code of ethics – which means much more than just dutifully meeting compliance regulations.  Ethics is the adherence to principles, not the submission to a short-term rulebook.

Now its time for you to shine.  So the following is the code of ethics that all members of the National Ethics Bureau pledge to uphold, but you do not have to join our organization to embrace its ideals:

• I will always commit myself to protect and promote the interests of my clients, and will always conduct myself in a way that reflects well on my profession.
• I will be totally honest when explaining my education and business background, professional designations, and years of industry experience.
• I will be completely truthful by not exaggerating the realistic returns or future value one can expect from any product, transaction, service, or investment that I may recommend.
• I will always disclose the important features of a product, transaction, service, or investment and disclose potential risks that may negatively affect future performance or value.
• I will always consider both my client’s current and future needs to determine the proper suitability of any recommendations that I may make. 
• I will respect the confidentiality of any information entrusted to me or obtained in the course of my business or professional activities.
• I will only use sales presentations and advertising materials, including product illustrations that are completely accurate and compliant with state and federal regulations.
• I will always provide my clients with copies of all required documents that relate to the product, transaction, service, or investment that I have recommended to them.
• I will always refer my clients to a more specialized professional advisor when their needs go beyond my current license or expertise.
• I will consistently educate myself as to the new laws and regulations in my industry, and I will always act in good faith toward those I serve.

Published in: Senior Market Advisor Magazine - September, 2005 — SMA Website

<<< Back to Articles